A rising star in the Australian gold industry, Dominion recently announced a revised nine-for-five share exchange offer for all the outstanding shares of Whim Creek.
The offer was made on condition that Dominion could purchase the Whim Creek shares owned by Northgate and Westfield. Dominion has also agreed to purchase Australian gold producer Austwhim Resources’ 11% stake (representing just under 4.4 million shares) in Whim Creek for $2.80 per share.
Dominion’s $2.80 per share offer for Whim Creek represents a 33% premium over the average price of Whim Creek shares traded since November, according to Dominion. The Australian dollar is currently selling at approximately $1.09(C).
But Whim Creek directors say the offer undervalues a company which is planning to produce 200,000 oz gold this year.
The Whim Creek interests owned by Northgate and Westfield are held through a jointly-owned private company called Norwest Holdings. Norwest is 51% owned by Westfield and 49% owned by Northgate.
Northgate is selling its stake in Whim Creek to concentrate on North American projects and from the proceeds, $9 million will be used to repay outstanding debts owed by Westfield to Whim Creek.
If the takeover bid gains shareholder support, Dominion will sell Whim Creek’s stake in Reveltek Ltd. to Bermuda-based merchant banker American Resource Corp. (ME) for $25.8 million(A).
Among other things, Reveltek’s offshore investments include a 46% stake in Westfield Minerals which is currently producing 9,000 oz gold per month at its 35%-owned Choquelimpie gold/silver project in Chile.
Westfield also holds a 35% stake in Dublin-based precious metals explorer Ennex International.
American Resource is a wholly- owned subsidiary of The International Pagurian Corp. which is in turn connected to the Bronfman family through the Hees International Corp. of Toronto.
The Bronfman controlled Great Lakes Group currently can increase its stake in Northgate from 5% to 18% when 3.6 million warrants are exercised.
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